Economy

US: Economy cools as retail sales dip, monthly producer prices decline. US retail sales fell for the first time in seven months in Oct as motor vehicle purchases and spending on hobbies dropped, pointing to slowing demand at the start of the fourth quarter that further strengthened expectations the Fed is done hiking interest rates. (Reuters)

US: Business inventories rise in Sept. US businesses maintained a fairly solid pace of inventory investment in Sept amid rising sales, government data showed. Business inventories rose 0.4% after rising by the same margin in Aug, the Commerce Department’s Census Bureau said. The increase in inventories, a key component of GDP, was in line with economists’ expectations. Inventories rose 1.3% on a YoY basis in Sept. (Reuters)

EU: Eurozone economy to undergo moderate recovery after challenging year. The euro area economy is expected to recover only moderately after a challenging year during which growth was damped by weak consumption and subdued foreign demand, the EC said in its Autumn Economic Forecast, released. The EU forecast the 20-nation currency bloc to grow by a modest 0.6% in 2023, which is less than the 0.8% estimated previously. (RTT)

EU: Eurozone trade surplus shrinks to EUR 9.2bn. The euro area trade surplus decreased in Sept as exports declined amid rising imports, data from Eurostat showed. The seasonally adjusted trade surplus declined to EUR9.2bn from EUR11.1bn in the previous month. Exports decreased 9.7% from a month ago, while imports grew 0.5% in Sept. (RTT)

UK: Inflation softens to 2-year low on energy, food prices. Faster-than-expected slowdown took British inflation to the lowest level in two years, soothing fears of further interest rate hikes by the BOE and Prime Minister Rishi Sunak claimed that he has delivered on his pledge of halving price growth ahead of election next year. CPI eased to 4.6% in Oct from 6.7% in the previous month, National Statistics reported. (RTT)

China: Adds stimulus as economic recovery picks up. China's central bank boosted liquidity in the financial system ahead of the release of official data that showed a faster-than-expected acceleration in industrial production and retail sales growth, which waned the possibility of the economy facing a substantial slowdown, although the real estate market continues to pose risks along with unfavourable external conditions. (RTT)

Japan: Industrial output recovers more than estimated. Japan's industrial production expanded more than initially estimated in Sept, the latest report from the Ministry of Economy, Trade, and Industry. Industrial production advanced 0.5% MoM in Sept, reversing a 0.7% decrease in the previous month. It was the first rise in three months. In the initial report, the rate of change in production was an increase of 0.2%. (RTT)

Indonesia: Trade surplus shrinks to USD3.48bn. Indonesia's foreign trade surplus decreased in Oct from a year ago as exports fell faster than imports, figures from Statistics Indonesia showed. The trade surplus shrank to USD3.48bn in Oct from USD5.59bn in the same month last year. Economists had expected a surplus of USD3.0bn. In Sept, the surplus was USD3.4bn. (RTT)

Markets

Tenaga Nasional (Outperform, TP: RM11.50): Inks "green" energy pacts with Huawei Malaysia & RHB Bank. The partnership with Huawei will accelerate its energy transition agenda by leveraging on digital transformation and tapping into new opportunities in green energy solutions. Meanwhile, its partnership with RHB aims to expedite the adoption of RE and energy efficiency (EE) solutions among SMEs and individuals through green financing solutions. (BTimes)

Dialog (Neutral, TP: RM2.40): Acquires Tarpon Platform Systems and Tarpon Systems assets for RM5.5m. The acquisition is in line with the group’s strategy to continue to expand and diversify across the upstream, midstream, downstream and renewable businesses of the energy sector, thereby increasing opportunities for synergies within the group. Tarpon Malaysia provides engineering, construction, installation and maintenance services to upstream energy companies that use the Tarpon platform system. (The Edge)

KPS (Neutral, TP: RM0.65): Lawsuit against the group alleging land fraud in Kuala Langat involves a 42-year-old deal. The Group is currently collating and reviewing pertinent documentation from 42 years ago and will be providing response via announcements to Bursa Securities and other related channels on material development in this case. The transaction involves two parcels of land at Brooklyn and Sungai Kelambu in Kuala Langat that measures a total of 9.21 acres, and were part of a mining scheme under KPS. (The Edge)

MAA Group: Sells 85% stake in Philippines general insurance unit with an option to sell remaining 15% stake. The total selling price of USD58m was arrived at after taking into consideration an implied price-to-book ratio of about 1.64 times. MAA Group is allocating RM187.7m for future investment opportunities, RM32.2m for working capital, RM41.8m for repayment of shareholder’s loan, RM13.5m for repayment of intercompany loans and the remaining RM1.1m for estimated expenses for the divestment process. (The Edge)

Crescendo: Inks disposal of Johor lands for RM111m. The sales consideration rate of RM125psf will be increased to RM127psf in the event a Tenaga Nasional power main switching station waiver is obtained on the lands. The Group is expected to record a consolidated gain after taxation of about RM68.3m from the sale. (StarBiz)

HSS Engineers: Inks JV to grow BIM services in Philippines. The JV company will be incorporated and registered as EDCOPHSS, which will provide advanced building information modelling (BIM) services and solutions. HSS will hold a 40% stake in the newly incorporated JV with EDCOP holding the majority 60% equity share. (StarBiz)

IPO: Plytec posts nearly 3.0pct premium on ACE Market. Plytec Holding made its debut on the ACE Market of Bursa Malaysia at 36 sen, reflecting a 2.86 per cent premium to its IPO price of 35 sen. The company raised RM37.1m from the IPO. (BTimes)

MARKET UPDATE

The FBM KLCI might open higher today after US stocks closed slightly higher on Wednesday, as fresh inflation data reinforced investor hopes that the Federal Reserve is done raising interest rates, while retail stocks were boosted by an upbeat forecast from Target. Additional data on Wednesday showed the biggest decline in producer prices in 3-1/2 years in October on the back of cheaper gasoline, offering more evidence of easing price pressures. Also on Wednesday, retail sales data showed a smaller-than-expected decline of 0.1% in October, against forecasts of a 0.3% fall. The Dow Jones Industrial Average rose 163.51 points, or 0.47%, to 34,991.21, the S&P 500 gained 7.18 points, or 0.16%, at 4,502.88 and the Nasdaq Composite added 9.46 points, or 0.07%, at 14,103.84. European markets finished broadly higher with shares in France leading the region. The CAC 40 rose 1.73% while Germany's DAX added 0.86% and London's FTSE 100 tacked on 0.62%.

Back home, Bursa Malaysia rose to more than an eight-month high on Wednesday as investors anticipated the US Federal Reserve to be already done with its rate hike cycle after the October data showed inflation has declined. At the closing bell, the FBM KLCI increased 1.04% or 15.12 points to end its intraday high of 1,466.84 compared to Tuesday’s closing of 1,451.72. Regional markets finished mixed with the Nikkei 225 gained 0.03%, while Hong Kong's Hang Seng jumped 3.9%. Shares in China were unchanged with the Shanghai Composite at 3,072.83.

Source: PublicInvest Research - 16 Nov 2023